Information on Merchant Accounts,
Ecommerce and Credit Card Processing

May 25th, 2006 by Jamie Estep

Guide to Merchant Account Affiliate Programs – Part 1

Filed in: Ecommerce, Guides, Merchant Accounts, My Favorite Posts | 1 comment

This is a two part post on merchant account affiliate programs. The first part will cover the basic types and payout amounts of merchant account affiliate programs, and the second will cover where to sign up for merchant account affiliate programs, and will list a number of available programs.

An affiliate program is an online referral program that is designed for website owners to refer visitors to another website in exchange for a commission on any transaction those visitors make.

Merchant account affiliate programs have become increasingly popular with web design, hosting, consulting, and businesses where customers may seek a recommendation on getting setup accepting credit cards. Merchant account affiliate programs have two basic payout structures: pay per lead, and pay per account.

Pay Per Lead
Pay per lead affiliate programs are where a flat fee or percentage is paid to the affiliate for each referral. A referral is normally considered a visitor applying for a merchant account. The affiliate is paid whether or not the applicant actually sets up a merchant account.

PPL Affiliate Chart


  • Paid for each application.
  • Paid whether or not an account is ever setup.
  • Faster turn around time for being paid.


  • Lower commission per action.

Pay per Account
A pay per account affiliate program is almost unique to merchant service affiliate programs. An affiliate is paid for each approved merchant account that they refer. Unlike a pay per lead program, the affiliate has to wait for the referral to be approved and processing before they are ever granted a commission.

PPA Affiliate Chart


  • Higher payout per referral.


  • A substantial percent of applicants wont ever get fully setup.
  • Delay in getting commission until merchant account is setup.
  • No control of the process once referral is made.

As you can see the two programs are similar, but offer completely different benefits. It is my experience that for merchant account affiliate programs, pay per lead affiliate programs are better for both the affiliate and the business they are referring to.

The simple difference between the two program types:
The key difference between a pay per lead and pay per account program is that affiliates with the pay per account programs have to wait and trust that the lead they referred will be turned into an account.

With a pay per account program, the merchant account process can be confusing and frustrating for affiliates who are waiting for their commission. Apart from that, the best merchant account provider is not going to convert more than 70% of their leads into sales. That means that in the best case scenario, 3/10 referrals will never be paid. Realistically, most providers will never break a 50% conversion from a lead to an account.

Payout Amounts:
Pay per lead programs usually pay between $5 and $25 per lead. Pay per account programs normally pay between $50 and $200 per account. When you get into the higher paying programs, there is very often additional requirements for the commission to be paid. Sometimes the requirements are as detailed as having a required monthly minimum processing volumes, or the referred business has to process for 3 or more months. The bottom line is that the time, complicated process, and limited payout window that pay per account programs offer, are not worth it.

Part 2

May 24th, 2006 by Jamie Estep

Article – 10 Easy Steps to a Horrible Ecommerce Site

Filed in: Ecommerce |

I wish that I would have seen this article sooner. Jason Chance of wrote an article, 10 Easy Steps to a Horrible Ecommerce Site, that covers many of the mistakes that new online businesses make. Here are a few excerpts from the article. I highly recommend new and existing online business owners to take a look at it.

Whatever shopping cart you use, the “stock” or default look is fine. After all, if it wasn’t the best layout of all time, why would they distribute it as “stock” in the first place?

All that junk about customers “Caring about their privacy” and being “Worried about identity theft” is unfounded. Just ask my friend “John” from Indonesia. Hey, by the way, he has $30,000,000.00 he wants to send you. He just needs your credit card number along with your name and billing address.

May 23rd, 2006 by Jamie Estep

3 Tips For New Merchant Account Owners

Filed in: Ecommerce, Merchant Accounts | 1 comment

For a new business, checking into the company merchant account is often near the bottom of the to-do list. It is very important to ensure that the merchant account is running smoothly and in a manner that is cost effective right from the start, to help to prevent problems that can arise in the future.

  1. Watch your statements carefully in the beginning.
  2. Don’t exceed your processing limits early on (or without notice).
  3. Check your bank account daily.

Watch your statements carefully in the beginning.
The first few months of a new merchant account are watched closely by the processing banks. Traditionally most fraud that occurs with merchant accounts, occurs in the first few months of processing. It is equally important for businesses to watch their own statements closely in the first few months of processing. The start of opening a merchant account is the best time to find errors and problems, because they can normally be corrected more easily than after the business has been processing for a long time.

What business owners should be watching for is that their business is setup with the correct merchant account type, that they aren’t downgrading excessively, and that there aren’t any major fees that they were unaware of.

Don’t exceed your processing limits early on (or without notice).
When you applied for your merchant account, there was a section on the application that asked you what your anticipated monthly volume was expected to be. This volume acts as a base line for comparing your monthly processing to. Processors use this amount to flag fraud and other risk factors. Another number that you entered was your average ticket size.

While growth to you is a great thing, quick unexpected growth is hated by most credit card processors as it opens avenues for fraud. Because of this, many businesses have been held back or even had their merchant accounts canceled due to growth.

Exceeding your monthly volume: It is my opinion that businesses should always check their merchant accounts using an online account access system, which is available with almost every merchant account. If your merchant account approaches your specified monthly volume, you should call your merchant account provider immediately. There is some leniency for the occasional high volume month, but if you consistently reach or exceeding your volume, you need to request a volume increase. If your processor cant increase it, you should start looking for a new processor. Believe me when I say that the negative reaction from some processors handling growth is far worse than shopping for another merchant account. Your current provider may also have another processing bank that will grant you a higher volume. Either way, this is something that should not be ignored.

The reason that this is also applicable to new businesses, is that they often have no idea what their volume is going to be. Hopefully if a guess was made, it was higher than needed, and if a lower guess was made, a volume increase or new merchant account should be a priority.

Exceeding your average ticket size: Almost every business has to run a few transactions over their average ticket size. After all it is an average, and not a limit. 10 – 15% is acceptable with most processors, and some like Nova often allow a 100% over transaction. But, running a $5,000 transaction when your average ticket size is set at $20 is not a good thing. The processor will force you to refund the money and collect payment with another form. They probably wont refund your processing fees as well. Now your mad at your processor, you just lost some money, your customer is inconvenienced and nobody is happy. If you expect that you are going to need to run a much larger transaction than your average ticket, call your processor. They may allow you to run a one time transaction because it just happens sometimes. If you expect that you are going to be seeing a lot of these larger transactions you either need a average ticket increase, or you need to find a processor that will let you have the high ticket size. Be prepared to prove that you do sell something costing that much (it would be hard to believe that a dollar store sold had a transaction for $5000, etc).

Check your bank account daily.
Just like anything, a merchant account sometimes has errors. At some point a human has to add your bank information to an electronic system. Although rare, this account number sometimes gets mixed up, and money goes to the wrong account. If this mix-up ever occurs, it is also soon after a merchant account is opened.

Since money is normally deposited into a business’ bank account about 48 hours after they process a transaction, there isn’t a good excuse for notifying your processor that you haven’t been receiving your money for two months. Check you bank account closely for the first few weeks and make sure that your money is going to the correct place.

These three small tips can help prevent about 90% of all the potential problems you can possible have your merchant account. Catching them early on will help to ensure that your credit card processing is transparent, allowing you to focus on the rest of your business.

May 22nd, 2006 by Jamie Estep

Verisign SSL – A Review

Filed in: Ecommerce | 1 comment

We recent upgraded our SSL certificate to a Verisign certificate from Geocerts. I have purchased SSL certificates from several different companies over the years, and I must say that the Verisign process is something different.

One of the main reasons people use Verisign for a SSL certificate is that they are very well trusted and you get to display a Verisign logo on your website. This is also one of the main reasons that we installed the certificate, trust. As far as SSL certificates go, 128 Bit encryption is the same whether you issue the certificate on your own server, or Verisign issues it to you.

The Verisign Process:
In this case we opted for the most basic Class 3 certificate that Verisign offers. The initial process of applying for the certificate was easy enough. Generate a CSR (Certificate Signing Request) on your own web server, fill out a few information forms on the Verisign website, pay a small fortune, and hit the process button. Once the charge is completed, Verisign goes to work on validating your business and then generating your certificate.

Coming from always using instant SSL certificates, I thought the certificate would arrive in my email in about 10 minutes. I did know that Verisign had a business verification process, but I had no idea how involved it really was. Verisign checks several things to verify that your business exists, and you are who you say you are. First, your domain registration is checked to ensure it matches your business information. Next, they check phone directories to ensure that your listed phone number is registered to the company, and is a listed number. Lastly, they check to ensure that your business actually exists, and is legally registered. Only when you have meet all of their verification, will they issue a certificate.

I personally though that we had all of our ducks in a row, but I had to fax Verisign about 5 different documents before we were fully validated. After the faxes and about two days of being verified we were issued the certificate.

Overall the process was fairly smooth, and the ease of getting setup is directly dependent on having your domain name registered to your exact business name, having your business’ contact number as a listed number in phone directories, and having your business legally registered.

I will post in a few months, whether I think the certificate is worth the extra cost. We track our sales very carefully, and should have an accurate model to the any increased or decreased sales within a few months.

May 17th, 2006 by Jamie Estep

McAfee Virus Scan for Credit Card Terminals

Filed in: Credit Card Equipment, Merchant Accounts |

Something new I learned today was that newer Verifone Omni 3750 credit card terminals can come with a mobile version of McAfee virus scan installed on them. While I have never heard of a credit card terminal virus, nor have I personally seen a McAfee installed Omni, I think this is a really interesting feature that is showing someone is looking toward the future.

The way this particular virus scanning system works, is similar to the computer based McAfee. A local scanning utility is installed on the terminal, which automatically watched for viruses and other malicious scripts. This software on the terminal is automatically updated from a central McAfee server. Because of the nature of the software, it would only be necessary for Omni’s processing over a broadband connection. In this case, the terminal could be vulnerable to anything that exists on the internet. Again, I have never hear of a credit card terminal virus, but as advanced as the Omni 3750 is, I think that it could be possible for someone to target these terminals with a virus.

I will post any updates on Credit Card Terminal virus scanning if I come across them.

Link to Verifone’s McAfee information page

May 16th, 2006 by Jamie Estep

Tool – Advanced Merchant Account Fee Calculator

Filed in: Ecommerce, Merchant Accounts, Tools |

A new tool is now available in the tools area. The advanced merchant account fee calculator takes downgrade and other charges into account and should provide a fairly accurate estimate of the cost of processing credit cards.

Link to The Advanced Merchant Account Fee Calculator

May 15th, 2006 by Jamie Estep

Verifone Omni Ethernet and IP Network Setup

Filed in: Credit Card Equipment, Guides, Merchant Accounts | 22 comments

The Verifone Omni 3740 and 3750 are able to process over the internet using a dual comm or Ethernet module. This allows the terminal to process transactions extremely quickly, and allows businesses to utilize existing internet capabilities and to avoid tying up a dedicated phone line.

This post is a simple guide to setting up a network allowing a Omni to process through it. The Omni can process on a network with just about any other hardware on it as long as the network is setup correctly. While it is fairly simple to setup the network, it can be tricky to get the omni to work smoothly right from the start. The biggest cause of failure is the Omni having an outdated software version. Once the correct software version is installed on the Omni, and the downloads are complete (may take up to 7 separate downloads for the terminal to be configured correctly), it is normally as simple as plugging the Omni in.

IP Based Connection (Cable Internet, DSL, T1, T3, etc)
Internet Router or Switch
Appropriate Cat 5 / Cat 5E / Cat 6 cables
Verifone Omni with Dual Comm or Ethernet Module

A simple knowledge of computer networking is helpful in setting the Omni up to process over an IP connection. Also, most processors do not have the ability to program the Omni over an IP connection, so the Dual Comm module is necessary to setup the Omni. This way, the Omni is programmed over a standard phone line, and then switched to the IP connection once it is properly programmed.

If you have broadband internet, all you really need to hook up the Omni is a router with an open port, and an Ethernet cable to connect the Omni to the router with.

Omni Network

Depending on the specific network, the Omni can be configured to connect to the router using DHCP (Dynamic Host Configuration Protocol) or with a static IP address. DHCP allows the router to assign an address to the Omni and can make setting up the entire network much easier. The IP address type and value are set in the Omni Communications Menu. This is something that should be set with the help of your processor’s tech support to avoid any problems.

As long as the Omni has the correct software versions and the downloads are completed successfully, processing over an IP connection is virtually a plug and go process. Outdated software versions, incomplete downloads and network misconfiguration can create a troubleshooting nightmare trying to get the Omni to process.

Another thing to keep in mind, is that back end processing networks still use analog technologies. An Ethernet connection is a digital connection. Your processor uses a 3rd party service to convert the digital omni transaction into an analog transaction on their end. Because of this, every omni has a unique signature and must be individually programmed with the processor and the 3rd party conversion service. While this setup is normally transparent, it can cause problems onthe back end, which your processor must clear up before the Omni can process.

Related Posts:
Convert an Omni 3740 or 3750 for Ethernet Processing
Tested routers for the Omni 3750 and other Verifone ethernet terminals

Related Information:
Setting up a simple computer network – solution 3 is recommended!

May 12th, 2006 by Jamie Estep

How much are you really paying for credit card processing? Want to find out?

Filed in: Merchant Accounts |

We are putting together a program so that business owners can get a breakdown of exactly what they are paying for their credit card processing from an industry professional.

Statement AnalysisProcessing statements are confusing at best, and they often make absolutely no sense at all. We are providing a free, professional, objective breakdown of any businesses processing statements. We will show you exactly how much you are being charged and where you are being charged. This is a great way to find out exactly what fees you are paying and find out any miscellaneous fees, monthly fees, unnecessary fees, downgrade charges and everything else that you may not have known about.

You will need to fill out the rate analysis form and then email or fax a copy of your statements in. The location to email or fax your statements is provided once you fill out the rate analysis request.

May 11th, 2006 by Jamie Estep

Credit Card Processing Industry Search History and Competition Analysis

Filed in: Ecommerce, Merchant Accounts, My Favorite Posts |

I was clued into a great tool made by google in the google lab, by Rand of Seomoz. It’s called Google Trends and it is a system that will let a user view a graph of the search volume for a given search term over time.

Naturally, I wanted to see how the top terms relating to credit card processing look. I would consider the top terms to be: Merchant Account, Accept Credit Cards, Credit Card Machines, and Credit Card Processing. For this article I searched for the first three.

What I found was an extremely troubling and unexpected graph.

Traffic Graph

Not only was this line sloping in the exact opposite direction that I was expecting, but the slope is much steeper than I ever could have expected. I added the red line to show a linear path of the slope of the line.

Since the beginning of the chart (2004), until now (2006), there has been a linear 50% reduction in search traffic for terms relating to credit card processing. The beginning of 2004 is coincidentally when we started actively competing for these related terms, and we also began advertising with Google and Overture pay per click programs. Since the time we started, the average cost per click across all terms in our industry has at least doubled. Pay per click adversing costs, are also a decent indicator, of the amount of competition for natural traffic.

What this means for websites relating to credit card processing is that the potential customers are searching on the internet 50% less now than 2 years ago, and the competition has increased by 100% or a factor of 2. Putting this all together, the merchant services field on the internet is now 400% more competitive than it was 2 years.

I’m not sure how accurate this graph is from google, and it is in a testing area of their services. The data itself is against everything I have read and calculated about the trends of traffic on the internet. But, it is a very interesting look into two ways that competition increases in business. I am interested to see if other industries experience the same trend.

May 10th, 2006 by Jamie Estep

Paypal Mobile Payments

Filed in: 3rd Party Processors, Industry News |

Paypal is now offering a system that lets members send payments via their mobile telephone. The system operates securely, and transactions still carry Paypal’s limited protection. There are several companies that already accept paypal mobile payments, and there are also a number of charitable organizations ready to accept donations.

What a great idea right?

Actually, I cant really see any use for a mobile payment system like this, neither as a pier to pier or a consumer to business system. Obviously, businesses that operate in mobile environments make great use or mobile processing. But as for a consumer, breaking out a cell phone, calling paypal, entering the transaction information, waiting for their confirmation phone call, entering your pin number, and then hoping that everything goes through correctly just seems like excessively complicated for most people to want to do. Secondly people are never quick to adapt to a new idea, no matter how great it may seem. If the internet were a bit less convenient, then maybe this system could have a running chance, but In my opinion, this is a flop. Time will tell..

News Article: Paypal launches Paypal Mobile